OTAs change Defense acquisition for the duration

Can a defense acquisition approach restore the military advantages Pentagon planners say the U.S. has lost over the past 30 years? If so, contractors should get used to living with two parallel acquisition systems. The regular Defense version of the Federal Acquisition Regulation. And, of course, the burgeoning Other Transaction Authority (or Agreement).

“Other” can be a scary word. Everyone professes loathing for the FAR and the DFAR because how they ostensibly slow everything down. But whole armies of sales and business development people have invested careers and gotten wealthy by playing the traditional FAR and defense acquisition systems the way Paganini played the violin. OTAs threaten that.

Not that OTAs are new. They date to the early 1960s. But they’re like an unused kitchen utensil that, when re-discovered, finds all sorts of convenient uses. For defense acquisition, OTA’s are out of the rummage drawer.

Congress has encouraged OTAs for obtaining non-traditional technologies from non-traditional vendors. It’s given DoD greater explicit authority to use them. Some OTAs have looked, at least on the surface, like regular deals for regular companies. Two recent awards to Perspecta (old company, new name) from the Defense Information Systems Agency to build the background investigation system come to mind. I’m not prepared to second guess DoD on this one, but OTAs are available to traditional companies doing non-traditional or prototypical things. But not, one hopes, to non-traditional companies doing ordinary things.

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A deep data analysis by Govini shows OTA activity in DoD having grown by a compound annual rate of 57% for the last six years. The base is small, but in 2018 they amounted to $3.4 billion. OTAs aren’t the only approach DoD uses for its research, development, test and evaluation investments. They only represent 8% of RTD&E spending. But the only part that’s growing. You could say they represent real money.

I mention all this, prompted by the round-number anniversary of D-Day approaching. OTAs fit in with a strategy having to do with numbers.

On D-Day, I think of those numbers. The sheer tonnage of platforms, materiel and, of course, human troops thrown by nations at one another produces wonder to this day. The D-Day invasion consisted of about 175,000 troops including 57,500 Americans. That’s just for the first few days of one piece of the plan to pinch Germany.

Warfare is totally different today because of technology. One 21st century precision bomb can inflict more real damage on an enemy than a squadron of bombers dropping hundreds of bombs over the course of an hour during the 1940s.

If from the Civil War to World War II sheer numbers dominance was the essential element for victory, later that dominance came from the sorts of technological advantages that produce greater lethality per troop. You might call it military productivity. In recent decades, the U.S. has attributed its advantage to technologies such as stealth and precision guidance, developed during the “second offset” of the 1970s. Offsets decay. How long did the atomic bomb offset last?

For some time the DOD has been trying a number of ways to speed up the identification and acquisition of … innovative? non-traditional? prototypical? …  technologies or capabilities. It wants a third offset, a reasonable aspiration. But also harder to obtain and sustain. Military leaders have been hunting diligently for evidence of technology that could lead to an offset. They theorize such technologies exist within companies unknown, at least, to the military. The OTAs can be a way to trap it in a way open competitions or wired traditional acquisition and their seemingly inevitable protests cannot.

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